SPAA takes responsible position on LRBAs
19 February 2014: The decision by the SMSF Professionals’ Association of Australia (SPAA) to engage with government, regulators and industry on Limited Recourse Borrowing Arrangements (LRBAs) exemplified its commitment to improving professional standards in this superannuation sector.
SPAA CEO Andrea Slattery told the 10th SPAA national conference in Brisbane today in her opening address that the organisation was working closely with a wide range of stakeholders on LRBAs as they relate to SMSFs and “will be able to provide government and regulators current information on what is really happening in this space.
“SPAA will also introduce Best Practice Guidelines for lenders and advisors, and by doing so it will allow the regulators to have the confidence to better target their policy settings.”
She said it was important to understand that about 90% of all current LRBAs represent less than 1% of all SMSF assets. In addition, APRA statistics show that the average loan value is $311,000, the LVR for a LRBA is typically between 60-75%, and the average asset value underlying the loan is about $450,000. “This does not paint a picture of irresponsibility,” she says.
Slattery said SPAA’s involvement in the LRBA debate was just one example of where SPAA was demonstrating its leadership credentials in the SMSF sector.
“Over the coming year, our advocacy and thought leadership program will address many of the challenges.
“SPAA’s main focus will include the Financial Systems Inquiry, tax inquiry and the pension inquiry that includes the ageing population and retirement debate.
“We will also be providing valid argument and guidance on how SMSF capital can be unlocked and used more efficiently for new markets such as infrastructure and bonds.”
Slattery told the 1400 delegates that the need to continue improving their professional standards had never been more important, and that SPAA was the only vehicle for achieving this ambition.
“SPAA is committed to continually raising professional standards and has now created a career pathway for our existing professionals and new entrants to build our industry.
“Today the importance of you continuing on your learning journey is paramount in building an SMSF profession.
“SMSF trustees are demanding value-added advice and services and they deserve to get this advice and services to meet their expectations. This factor was highlighted by the SPAA-Russell Investments annual report into the SMSF sector that was released yesterday.”
The SMSF Professionals’ Association of Australia (SPAA) is the authoritative voice for the self-managed superannuation fund (SMSF) sector. SPAA, which represents professionals providing a range of services across various disciplines in the complex area of SMSFs, is an advocate for the highest professional standards and competence to ensure SMSF trustees always receive the best possible advice.